Buying A House: C or D?

There's a very dark article in this week's New York Review of Books about the coming homeowners' insurance crash. It's behind their paywall, but I'm a subscriber, so if anybody wants to read it I'll paste it here.

climate change = more destruction of houses - :(

We have these in SF, they are called tenancies-in-common and while most major lenders shy away from them there are smaller lenders (RIP SVB) that I believe continue to underwrite them.

― citation needed (Steve Shasta), Thursday, November 9, 2023 11:54 AM (one month ago)

SF strictly regulated them as they were a common means of eliminating affordable rental housing from the market, and it wasn't uncommon for the new owners to not actually live in their units and basically convert them to market rate rentals.

There's a very dark article in this week's New York Review of Books about the coming homeowners' insurance crash. It's behind their paywall, but I'm a subscriber, so if anybody wants to read it I'll paste it here.

― Tahuti Watches L&O:SVU Reruns Without His Ape (unperson), Sunday, 12 November 2023 00:07 (four weeks ago) link

just got a letter saying we're getting a deductible rate adjustment due to hurricanes.

I just posted this in the Los Angeles thread today:

Found out today that the house insurance has been cancelled. We're a mile away from the state defined Very High Fire Hazard Severity Zone border (hell, we're closer to the 210 freeway than we are to the hillside) but nevertheless...

Background to all this from Sept. 2021: https://www.latimes.com/business/story/2021-09-26/california-fire-insurance-moratorium-expire

A California moratorium guaranteeing insurance in wildfire-threatened areas lapsed Saturday, putting 347,000 homes in Pasadena and other Los Angeles foothills communities at the mercy of the market.

As many as 2.4 million homes are at risk of losing protection in 2021 as yearlong grace periods expire — though new disasters may extend their shields. In all, 18% of the state’s households could effectively lose protection, the largest single group since the moratorium law took effect three years ago.

“We’re going to pay the bill for climate change one way or the other, and it’s just a question of how we divvy up that cost,” said David Russell, co-director of the Center for Risk Management and Insurance at Cal State Northridge. “What California politicians are trying to do is tinker with how we do that. They’re buying time, hoping they get a break.”

Climate change has been rough on the world’s fifth-biggest economy: Wildfires torched nearly 4 million acres last year and more than 2 million so far this year; the Dixie and Caldor fires, two of the biggest, still aren’t entirely contained.

Fires in 2017 and 2018 alone wiped out more than a quarter-century of underwriting profits for the California insurance market, according to Milliman Inc., a risk assessment company. As insurers rushed to recalibrate risks, consumers were shocked by canceled policies and soaring rates.

In 2018, after the Camp fire destroyed more than 18,000 buildings, lawmakers in Sacramento prevented insurance companies from canceling homeowner policies in or adjacent to wildfire areas for 12 months after the day of an emergency declaration. The idea was to protect consumers after traumatic episodes and to give them time to make their homes more fire resistant. That, ideally, would prevent higher rates or cancellations.

“Even when these moratoriums end, they have given people time to make their homes safer,” California Insurance Commissioner Ricardo Lara, said in a statement to Bloomberg, an argument he has made on numerous occasions. “I expect insurance companies to take that into account.”

It’s hard to tell whether this is wishful thinking or effective policy. Even before the law was enacted, California’s highly regulated market was seeing insurers quit the state or refuse to write new policies. In 2019, the last period for which information was available, the state saw a 31% uptick in non-renewals. Over the same period there was a 36% increase in homeowners using the California FAIR Plan, the state’s bare-bones alternative for those who can’t get insurance in the traditional market.

What are you going to do Elvis?

An inspector from AAA is visiting tomorrow, but I get on edge when I see stories like this: https://abc7news.com/ca-homeowners-insurance-homeowner-cancellation-policy-nonrenewal-not-renewed/13619472/